The major bank has recorded its largest uptick in business lending growth for June, as it focuses on higher-margin lending.
National Australia Bank (NAB) has reported its highest ever monthly business lending growth for June, with the major bank seeing business lending balances rise by $4.6 billion.
According to figures reported to the prudential regulator, NAB’s loans to non-financial businesses grew 2 per cent, from $243.2 billion to $247.7 billion, its largest monthly growth for the month of June.
When looking at total gross loans and acceptances for business loans in its third quarter ending June 2025, NAB’s business portfolio totalled $323.9 billion, up from $316.2 billion in the previous quarter (ending March 2025). When comparing June 2024 total gross business loans to June 2025, NAB’s business lending was up 7 per cent.
In its third quarter trading update, the major bank also revealed it grew business and private banking (B&PB) lending by 4 per cent over the three months.
The growth in business lending comes as the bank continues to execute its long-term strategy to drive growth in B&PB and deliver stronger returns, as the major bank continues to assert its dominance as the leading business bank for SMEs.
NAB currently has more than 21 per cent of the business lending market, the largest in market.
In comments to The Adviser, a NAB spokesperson said: “This result reflects the focus we have on managing the business and executing our strategy.
“We’re making good progress on the three business priorities we outlined at the half – growing our core business banking franchise, driving our performance in deposit gathering, and improving in proprietary home lending.”
NAB posted a 2 per cent uplift in home lending over the three months to 30 June 2025, taking total gross loans and acceptances for housing up to $435.2 billion.
According to APRA’s most recent Monthly Authorised Deposit-taking Institution Statistics report, NAB’s owner-occupied and investor lending book sat at $334.67 billion in June, the third-largest total of the big four banks.
The major noted that arrears in its Australian mortgage portfolio were flattening, and that there were early signs of stabilising ratio trends in its B&PB business lending portfolio.
Deposits across both business and households were broadly stable over the quarter, but increased 6 per cent over the nine months to 30 June 2025, which NAB CEO Andrew Irvine said reflected the bank’s long-term focus on improving deposit performance.
Payroll blunder could cost $130m
The statutory net profit (unaudited) for the quarter was $1.66 billion, in line with the quarterly average for the first half of the year.
NAB generated underlying profit growth of 4 per cent year on year and 3 per cent growth compared to the quarterly average for the first six months of its financial year.
However, expenses rose 3 per cent, mainly reflecting higher personnel-related costs, including payroll remediation costs following an issue with its payroll systems that saw staff being underpaid (and which are still under investigation).
While the extent of the issue has not been released, the costs are so far estimated to be around $130 million, according to the bank’s update, though total costs are still to be finalised.
NAB said it therefore now expects FY2025 operating expense growth of approximately 4.5 per cent. That includes costs associated with a program to identify, rectify, and remediate payroll issues, which the bank CEO Irvine said were “disappointing and must be fixed”.
The major bank added that it has initiated a broader review into payroll-related benefits under current and certain historical agreements.
The bank’s group executive, people and culture, Sarah White, said: “Paying our colleagues correctly is an absolute priority. We are sorry and apologise to our colleagues that this has happened and have commenced remediating those impacted.”
A dedicated team is continuing to investigate and resolve issues, remediate colleagues, and ensure sustained future compliance.
NAB is the latest big four bank to publish information on its recent financial performance.
Last week, Westpac posted 1 per cent Australian housing loan growth (excluding RAMS), 5 per cent business loan growth, and 2 per cent institutional loan growth between the March and June quarters of 2025.
The Commonwealth Bank of Australia (CBA) released its financial results for the financial year ending June 2025 (FY25), revealing that its focus on proprietary mortgage lending had resulted in falling broker flows and a dominating proprietary channel.
